South African
deputy president
Kgalema Motlanthe
London, England — 27 September 2013 – Mining investors are moving closer towards a strategic dialogue with the South African government about the future of the country’s mining industry, following investor engagements headed by deputy president Kgalema Motlanthe, finance minister Pravin Gordhan and mineral resources minister Susan Shabangu.

Despite tensions over proposed legislation aimed at encouraging mining companies to sell part of their raw material to manufacturers for value-added beneficiation, there was a willingness to listen to the South African government’s case on the way past inequalities still fuelled instability in the industry, reports

The South African leaders made it clear that the draft legislation was not written in stone and that the government was prepared to listen to proposals for amendments to sections which would give the mineral resources minister discretionary power to force companies to sell raw materials at a price determined by the state.

Since the Marikana tragedy in August last year, when 34 miners were killed after Lonmin’s platinum mine negotiated separate pay increases for rock-drill operators, there has been little or no new foreign investment in the South African mining sector, and its performance has dropped well below levels in other mining countries.

The focus in the mining industry is now on the new legislation which seeks to ensure that more of South Africa’s mining wealth remains inside the country for purposes of development, creating jobs, fighting poverty and ensuring that those communities which contribute to mining wealth see some of the benefits.

This overall objective remains non-negotiable for the government. What remains unresolved, however, is how it is going to be achieved.

The emerging dialogue between the industry and the government is headed in the direction of creating a more collaborative relationship between government, labour and business which would be able to address strategic issues and ensure the medium- to long-term stabilisation of South Africa’s mining industry.

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